Stockmarket, how far could it drop, and is it a good time to buy shares.

In message , mick writes

I forecast 3900 as the bottom a long way back but I am inclined to think that I was a little too optimistic so would now look to 3200. However trying to forecast the level is like trying to forecast when to buy, trying to get in at the bottom and out at the top isn't easy.

Well Warren B has reportedly started to buy, I haven't it is up to you who you follow unless you want to make your own decision.

Don't be misled by any bullshit from anyone.

It's a market. That means that there is always an approximate balance between the number of buyers and the number of sellers at the present price. And that means opinion amongst those who buy and sell is always divided about 50:50 as to whether the market is currently good value or not. No-one knows for sure, whatever they claim, and those that claim to know are charlatans, pure and simple.

FWIW: I expect the FTSE100 to bottom at 1500 give or take 500.

FoFP

I think it has a bit more to go I am looking at the 3500 mark I was checking out mining and the thing that shocked me as i could not trade minig as it was so so volitile was that LSE:AQP along with ANTO, and LMI have drop so much in fact if we take housing stocks and banks out that is where the stock market bubble had burst. It is a dash for cash............ The Question is if Rio was Valued at £70 / share and is trading at £21/ share. What is its true value. Now if translate that to house prices and the money need to purchase Say Rio or a 4 bedroom house and we are using P/e from the stock market to the house market then i would say we have a long way to drop. I will be a slow long grind in the negative direction........

THe last factor i would add to this is the fact the major banks, hedge funds are all in the CDS market. Now that is valued at $1 quad drillion. The world economy is values at $50 Trillion. With such heavy exposure it will be a hard way to fall. Let not forget that the federal reserve at lending the market about $1.8 Tr / pay on average. With defaults rising someone has to pay and that will be us via our pension funds and tax money. Also once wehave bailed out the banks they will evict us from our homes just to tell us the capitalism is working well for them but not us......

But is there money still to be made hell yes. Just dont listen to BBC, Bloomberg CNBC and the rest of the gang. Think like a true pro. Where there is movment there is money to be made. If people are selling WHO the HELL IS BUYING. Its the same banks that cry we need more money. Investing is on holiday for the next 3- 6 months Its The traders that will be making money.........

THe only reason I know what is going on I subcribe to an online site in the Uk that offer a lot of stuff for free. They trade the UK Forex and the DAx. And they share their thoughts nearly everydqay via their webiste or you sign up and get the emails to thier Free Video letters about the market.

I remember when on Bloomberg TV they was talking the market up and would end higher at the end of the year. Its a show. like X-factor. Which idiot can say that the market will end high for Jan 2009 or we have hit the bottom....... Mick I like the fact you can see where the market is heading but most people dont have a clue.....

I trade now I dont hold position no longer than a few days and the guys veritastraders know their stuff..... I liked their site so much i stole their name for my postings. I dont think they will mind cause you all can see for yourself....

If you guys want to know how to invest think like a pro.... if share have lost their value and I am selling WHO THE HELL IS BUYING MY SHARES???? Houses dont work the same way. your tennant is not like will not provide a healthly divedend! They live in the real world to pay rent they will need jobs and to pay the rent needed to cover the forward p/ E that most landords paid for the property will become impossible.....

So i see a pit fall of 2000 pts on the Ftse as a massive extreme but i am looking at the CDS market looking at how much cash people need and trading rather than investing. if a stock has given you 50% then take at least 25% and find the next guy. Go long and Short and live like a trader not a mom pop invester.....

Please look at

Hope this was not tooooo long look forward to your replies

Later

i forgot to add i have mate that works for Westpac in Oz and he was at a conference. Blackrock and templeton fund managers were openly saying they are going moving their money to Japan. The USA is not a good place to have their money...... So foget what they say in private its what really do that counts...

OZ banks still have some of the best rating going as my mate in oz told me so if you need places to invest maybe Oz should be on your list.

Cheers

In message , M Holmes writes

You may well be right but I prefer to take it in small bites, there is a long way to go before we see the full effects of what is happening and there will be plenty of time to make decisions.

Back in 1987 when I saw the Japanese market was going to go down, I put the target at 8000. Looks like they'll cross that again soon, possibly even tonight. I have to admit, I'm wondering whether they're a buy. They've had 20 years of debt-deflation, how much more can they be affected by our going through it?

FoFP

In message , M Holmes writes

Down to 7649

They look relatively cheap against other markets but I don't think I would buy just yet.

Congratulations! Just 21 years later, and you've been proved right.

Another guru worth following, obviously.

Congratulations. You've just shown you're unable even to Google.

I'm sorry, I'm afraid we don't take stupid people.

FoFP

I know in 2003 the FTSE100 went as low as 3400 or thereabouts... but do you seriously think it could be as low as 1000??... anyone got any stats to show what previous recessionary troughs brought about as lows? I was around in the recession of the early 70's and 80's, but was not savvy enough (or boring enough maybe) to take a mental note probably because I didnt have the numbers of shares then that I have today.

Would you care to show your working on that one?

And, possibly more important, where do you think it will go after hitting bottom? Back up or sideways?

Sure. When we were last at this point in a credit cycle, in 1929, the Dow index fell by 89% peak-to-trough.

It didn't fall as far as that in the 1987 crash (maybe 25% peak-to-trough), but then that wasn't an end-of-cycle crash.

Falls of two-thirds are typical of the crashes post a credit bubble. This being the largest credit bubble in history though, I expect to see falls larger than that.

That said though, this time housing, not shares, are the primary asset. Could be the large falls will be confined to house prices. I wouldn't bet my own money on shares escaping though.

FoFP

Typical falls of previous post-bubble crashes. Plus I think this will go back to where we were at the start of the bubble in the mid-80's.

Harder to predict. It'll go up, but it could easily go sideways for quite a while before that.

If it goes sub-2000 though, I think the index would be a good long-term buy for a pension fund.

FoFP

The index is a linear measure, i.e. one-dimensional. It can only go up or down or stay the same. What do you guys mean by "sideways"?

It trades within pretty much the same range for months or years.

FoFP

If you plot the index against time, you have two dimensions. If it stays constant for a period then the graph will go sideways (with time along the x-axis).

Stay the same. It is shown as a horizontal line on the chart, so it is called going sideways, as opposed to diagonally up or diagonally down.

I would be interested in finding out your thinking behind this figure. Possibly more importantly I'd also be interested in your thinking as to what the market will do after reaching bottom. Are we heading for a period where the market goes sideways for a number of years?